Investors’ Rights And Interests Protection In China Cooperating Business Between Banking And Trust

The cooperating business between the bank and the trust company developedgradually and deeply with the domestic bank financing business. As the21st centurycomes, the commercial bank financial market prospers and strives to break the limit ofmixed operation in the hand of trust company. By2007, the trust company hasbecome the main platform of bank financial products. Because of the limitation of themarketing branches, the trust company to a certain extent also depends on the bankagents to help to promote the trust products. However, in recent years, with the trustproject maturing, some cooperating products are in the risk of redemption on schedule.So the further study of the rights and interests protection of investors in Chinafinancing market of banking and trust cooperation also becomes urgent and realisticsignificance. It is also helpful to maintain the steady and healthy development of thefinancial services market in China.Besides an introduction and conclusion, this article is mainly divided into fourparts:The first part is to put forward questions. The introduction and analysis of thecase between China Everbright Bank and Anxin Trust and the case about ZhongchengTrust lead to the question about the rights and interests protection of investors and thisthesis mainly research some themes related to this question.The second part is to introduce the cooperating business between the bank andthe trust company, and the legal relationship between the parties. In the mode ofcooperating finance of the bank and the trust company, the investors deliver the money to the bank for the sale of financial products and the trust legal relationshipestablishes between the investors and the bank; Then the bank gives the capital frominvestors to the trust company to set up a trust plan and the trust relationship betweenthe bank and the trust company is established. Due to the blocking function of trustrelationship, there is no legal relationship between investors and trust companies.Inthe business that the bank helps the trust company to promote the trust plan, theinvestors establish the trust legal relationship with the trust company under the bankintermediary introduction. The bank plays as their intermediator. But in practice, withits customers(investors) and project resources superiority, the bank tend to dominatethe cooperating business, and the trust company works just as the bank’s business"channel" or "platform", so a inequality in legal status between the bank and the trustcompany occurs.Once the credit risk of the trust project occurs, the rights andinterests of investors may be damaged because distribution of responsibility betweenthe bank and the trust company is not equivocal.The third part is the necessity analysis of protection of the rights and interests ofinvestors in the cooperating business. The rights and interests protection of investorsin the financial market is based on the universal theories including the principal-agenttheory, asymmetric information theory and the public interest theory. And in thepractical operation, there exist questions including trading information asymmetry andgreat disparity in human resources, goods and capitals between the financialinstitutions and the investors, so the investors are in a relatively weak position. Inaddition, investors are the capital suppliers in the financial services market and therights and interests protection of investors is one of the core content in the capitalmarket development. Therefore, the rights and interests protection of investors in thecooperating business has a solid theoretical foundation and realistic necessity.The fourth part is to inspect the current legal system of the cooperating businessinvestors rights and interests protection, to analyze the existed defects andinsufficiency, and to accordingly put forward the corresponding countermeasures andsuggestions from the four aspects including the legislative, legal enforcement, judicial,and self-discipline. Our current financial legal systems involve the related articles.But the cooperating business investors rights and interests protection is not paidenough attention, the general articles lacking operability, legal supervisionenforcement insufficient and financial institutions lacking self-discipline and soon.Aiming at the shortcomings and deficiencies, this part mainly puts forward toperfect the related countermeasures and suggestions to protect the rights and interestsof investors in the cooperating business from the perspectives of the legislative, legalenforcement, judicial, and industry self-discipline.Through the involved bodies’ jointefforts, the investors’ legitimate rights and interests deserves fairly protection, whichwill promote the healthy and stable development of financial market in China.